Fitch Ratings has downgraded Ukraine's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to 'C' from 'CCC'. Fitch typically does not assign Outlooks to sovereigns with a rating of 'CCC+' or below. Fitch has removed all of the ratings from Under Criteria Observation (UCO).
The decision is related to Kyiv's plans to negotiate with creditors to defer payments on public debt for two years. The agency hasn’t ruled out a downgrade to RD (limited default).
Fitch downgraded Ukraine's rating from B to CCC after the start of the full-scale Russian invasion at the end of February.
As reported, the Ministry of Finance of Ukraine will ask foreign creditors for a deferral. This will be a reversal for Kyiv, which from the beginning of the war insisted on the full payment of its obligations.
Earlier, the IMF noted that Ukraine is “carefully” servicing its external debt and the country doesn’t need deferred payments. The Foundation called for partner countries to additionally support the country with grant funding.
